Service Outside Hague Convention

This appeal considered the validity of service of a Statement of Claim in accordance with The Hague Convention on defendants located in a state that is not a party to that Convention. The Court confirmed that in such states service in accordance with the Ontario rules is sufficient, and that service under our rules does not conflict with the domestic sovereignty of the state in which the defendants are resident.

Facts: The case arises out of a family dispute involving members of the Gutierrez family in Canada and certain family run corporations as plaintiffs, with other members of the family and other family run corporations domiciled in Guatemala. Guatemala is not a State Party to The Hague Convention.[1] The plaintiffs commenced suit in Ontario and attempted service on a variety of the defendants, mostly by delivery of a copy to their residence or workplace. It was agreed that this service did not constitute personal service in accordance with the local laws of Guatemala, and the defendants (represented by counsel) argued that they had not been properly served and were not proper parties to the action. The decision comes by way of appeal of the order of the Divisional Court, on appeal from the Superior Court of Justice.

Issues: What rules for service should determine whether the defendants were properly served? Does the principle of comity require our Courts to require service in the manner provided for by Guatemalan law?

Decision: Ontario’s Rules of Civil Procedure set out alternative provisions for service depending on whether the named defendant resides in a State Party to the Convention or not.

R.17.05(3) provides that, in contracting states, claims must be filed “through the central authority in the contracting state or in a manner permitted by the Convention and permitted by these Rules if the document were being served in Ontario.” [emphasis added]

As Guatemala is not a contracting state there is no central Convention authority, and service must be effected under the general provisions for extra-provincial service at R17.05(2). This requires that the defendants by served “in the manner provided by these rules for service in Ontario, or in the manner provided by the law of the jurisdiction where service is made…” [emphasis added]

While it was agreed service was contrary to Guatemalan law, the Court agreed with the courts below that service was consistent with the manner provided for service in Ontario, satisfying the requirement of 17.05(2).

The foreign defendants further argued, however, that the rules of comity required the Court to reject this interpretation of the Rules as being inconsistent with the international law principles of respect for state sovereignty. In this case, that would mean service in accordance with Guatemalan law, and not service in accordance with Ontario law that conflicted with Guatemalan law.

The Court noted (at para 22) the decision of the Supreme Court in R v. Hape, [2007] 2 S.C.R. 292, which establishes the rebuttable presumption that Canadian legislation complies with Canada’s international obligations, whether by Convention or under Customary International Law (CIL):

“The presumption of conformity is based on the rule of judicial policy that, as a matter of law, courts will strive to avoid constructions of domestic law pursuant to which the state would be in violation of its international obligations, unless the wording of the statute clearly compels that result.”

However, the Court rejected the underlying argument about interference with Guatemala’s sovereignty. The Rules in question “do not purport to legalize service that would be illegal in Guatemala”, or even establish the appropriateness of the forum, which may be challenged on motion. Rather, they “establish the means of satisfying an Ontario court that foreign defendants have received notice of an Ontario action” (para.30), which is not an affront to sovereignty or interference with the domestic affairs of the state in which the defendants happen to reside.

The Court also referenced a similar case faced by the Supreme Court of the United Kingdom[2] in which Lord Sumpton reasoned that

“[t]he characterisation of the service of process abroad as an assertion of sovereignty may have been superficially plausible under the old form of writ…. But it is, and probably always was, in reality no more than notice of the commencement of proceedings which was necessary to enable the Defendant to decide whether and if so how to respond in his own interest. […] The decision is generally a pragmatic one in the interests of the efficient conduct of litigation in an appropriate forum.”

Result: The defendants’ appeal was dismissed with costs the responding plaintiffs in the amount of $20,000.

[1] The Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters signed at The Hague on November 15, 1965.